Estimating Online Revenues for Newspapers

eMarketer is out with a new forecast for online newspaper revenues, which is based on armchair methodology, but is basically in line with prior efforts from The NAA (very optimistic) and Borrell Associates Inc. (fairly optimistic).

The new eMarketer study is based on tallying the online results from the few public newspaper companies that still report online revenues. Most have ceased such breakouts. Those numbers are then pro-rated based on macro Internet advertising numbers supplied by IAB/PWC.

eMarketer’s methodology stands in stark contrast to the legwork done by NAA and Borrell Associates, both of which receive confidential reports from a wide swath of the newspaper industry. Borrell, for instance, receives reports from 567 newspapers, or 39 percent of all U.S. newspapers.

Those methods have issues of their own, of course, since newspapers count online revenues in different ways. Many critics suggest that the self-reporting leads to exaggerated results. In fact, it is possible that eMarketer benefits from having less newspaper information. But at least NAA and Borrell seek to reconcile such numbers.

For the record, we note here that eMarketer is saying that newspapers made $1.03 billion in 2004 and predicts that they will make $1.4 billion in 2005. NAA hasn’t forecast its 2005 numbers yet, but said that newspapers made $1.5 billion in 2004. It found that newspapers made $500 million in Q2, so newspapers would be theoretically in line to surpass $2 million for the year. Borrell reported $1.19 billion for 2004 and forecasts $1.52 billion this year.